ASHOK GOYAL V. UNION OF INDIA AND ANR.

CWP/10534/2007

AI Insights

This case involves a bunch of 59 writ petitions challenging the amendments made to Sections 245D(2A), 245D(2D), and 245HA of the Income Tax Act, 1961, by the Finance Act, 2007. The petitioners, whose premises were searched under Section 132 of the Act, had filed applications before the Settlement Commission under Section 245C(1) for various assessment years. The amendments required the payment of additional tax and interest by July 31, 2007, for applications filed before June 1, 2007, failing which the applications would not proceed. The petitioners argued that these amendments were retrospective and arbitrary. The Supreme Court's decision in Brij Lal's case, which upheld the amendments, was pivotal in the High Court's decision to dismiss the petitions.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 685316 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 05-08-2013
• Assessment Year: misc
• Other Referred Cases: Brij Lal and others Vs. Commissioner of Income-Tax [2010] 328 ITR 477 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RAJESH KATOCH
• Assessee Lawyers: AKSHAY BHAN; ALOK MITTAL
• Keywords: Additional tax; Income Tax; Interest on default; Retrospective amendment; Settlement commission; Ultra Vires
• Section: 154; 132; 234B; 234A; 234C; 245C(1); 245HA; 245D(2C); 245D(1); 245D(2D); 245D(2A)

Judgement Text

"CWP No. 10534 of 2007 and connected matters -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ***** Date of decision : 5.8.2013 1. CWP No. 10534 of 2007 Sh. Ashok Goyal ........Petitioner Vs. Union of India and others ....Respondents 2. CWP No. 11022 of 2007 Munish Promoters and Developers Pvt. Ltd., Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 3. CWP No. 11023 of 2007 M/s B.M. Exports Pvt. Ltd., Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 4. CWP No. 11024 of 2007 Nangali Agro Tech. Pvt. Ltd., Gurdaspur ........Petitioner Vs. Union of India and others ....Respondents 5. CWP No. 11025 of 2007 Bombay Metal Works Pvt. Ltd., Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 6. CWP No. 11026 of 2007 M/s Parmeshwar Steels, Ludhiana ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -2- 7. CWP No. 11027 of 2007 Shree Ganpati Synthetics Pvt. Ltd., Amritsar ........Petitioner Vs. Union of India and others ....Respondents 8. CWP No. 11028 of 2007 Shri Nangali Rice Mills (P) Ltd., Mandi Gurdaspur ........Petitioner Vs. Union of India and others ....Respondents 9. CWP No. 11029 of 2007 Sonia Vohra ........Petitioner Vs. Union of India and others ....Respondents 10. CWP No. 11030 of 2007 Mani Mehra ........Petitioner Vs. Union of India and others ....Respondents 11. CWP No. 11031 of 2007 Sh. Vishesh Mehra ........Petitioner Vs. Union of India and others ....Respondents 12. CWP No. 11032 of 2007 M/s Damini Resorts & Builders Pvt. Ltd., Ludhiana ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -3- 13. CWP No. 11033 of 2007 M/s Basant Colonisers & Builders Pvt. Ltd., Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 14. CWP No. 11034 of 2007 Ranjit Kaur ........Petitioner Vs. Union of India and others ....Respondents 15. CWP No. 11035 of 2007 Anil Kumar ........Petitioner Vs. Union of India and others ....Respondents 16. CWP No. 11036 of 2007 Munish Manufacturing Corporation, Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 17. CWP No. 11037 of 2007 Baldev Raj ........Petitioner Vs. Union of India and others ....Respondents 18. CWP No. 11038 of 2007 Dev Arjuna Promoters and Developers Pvt. Ltd., Ludhiana ...Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -4- 19. CWP No. 11039 of 2007 M/s Ram Nath Aggarwal & Sons, Gurdaspur ........Petitioner Vs. Union of India and others ....Respondents 20. CWP No. 11040 of 2007 Usha Kiran Bhasin ........Petitioner Vs. Union of India and others ....Respondents 21. CWP No. 11041 of 2007 Rajeev Vohra ........Petitioner Vs. Union of India and others ....Respondents 22. CWP No. 11042 of 2007 Rajesh Kumar Mittal ........Petitioner Vs. Union of India and others ....Respondents 23. CWP No. 11043 of 2007 Munish Kumar ........Petitioner Vs. Union of India and others ....Respondents 24. CWP No. 11044 of 2007 Shikha Bhasin ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -5- 25. CWP No. 11045 of 2007 Neha Bhasin ........Petitioner Vs. Union of India and others ....Respondents 26. CWP No. 11046 of 2007 M/s Goldwheel Projects Pvt. Ltd., Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 27. CWP No. 11047 of 2007 M/s Prabhu Steel Traders, Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 28. CWP No. 11048 of 2007 Bhasin Industries, Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 29. CWP No. 11049 of 2007 Anil Kumar Mittal ........Petitioner Vs. Union of India and others ....Respondents 30. CWP No. 11050 of 2007 Gian Chand Mehra ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -6- 31. CWP No. 11051 of 2007 Jasjit Singh ........Petitioner Vs. Union of India and others ....Respondents 32. CWP No. 11052 of 2007 Munish Forge Pvt. Ltd., Ludhiana ........Petitioner Vs. Union of India and others ....Respondents 33. CWP No. 11053 of 2007 Sh. Munish Bhasin ........Petitioner Vs. Union of India and others ....Respondents 34. CWP No. 11054 of 2007 Inderjit Singh ........Petitioner Vs. Union of India and others ....Respondents 35. CWP No. 11055 of 2007 Parmod Kumar ........Petitioner Vs. Union of India and others ....Respondents 36. CWP No. 11056 of 2007 Manoj Kumar ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -7- 37. CWP No. 11057 of 2007 Raj Kaushlya Bhasin ........Petitioner Vs. Union of India and others ....Respondents 38. CWP No. 11058 of 2007 Sunil Khanna ........Petitioner Vs. Union of India and others ....Respondents 39. CWP No. 11059 of 2007 Anil Kumar ........Petitioner Vs. Union of India and others ....Respondents 40. CWP No. 11060 of 2007 Satish Kumar ........Petitioner Vs. Union of India and others ....Respondents 41. CWP No. 11061 of 2007 Anil Khurana ........Petitioner Vs. Union of India and others ....Respondents 42. CWP No. 11062 of 2007 Munish International, Ludhiana ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -8- 43. CWP No. 11063 of 2007 Dharam Paul Mittal ........Petitioner Vs. Union of India and others ....Respondents 44. CWP No. 11064 of 2007 Renu Mehra ........Petitioner Vs. Union of India and others ....Respondents 45. CWP No. 11065 of 2007 Rakesh Khanna ........Petitioner Vs. Union of India and others ....Respondents 46. CWP No. 11066 of 2007 Devinder Bhasin ........Petitioner Vs. Union of India and others ....Respondents 47. CWP No. 11067 of 2007 Vijay Kumar ........Petitioner Vs. Union of India and others ....Respondents 48. CWP No. 11068 of 2007 M/s Jasbir Light & Tent House, Ludhiana ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -9- 49. CWP No. 11069 of 2007 Balraj Bhasin ........Petitioner Vs. Union of India and others ....Respondents 50. CWP No. 11070 of 2007 Shree Ganpati Creations, Amritsar ........Petitioner Vs. Union of India and others ....Respondents 51. CWP No. 11071 of 2007 M/s Pali's Cater to Cater, Chandigarh ........Petitioner Vs. Union of India and others ....Respondents 52. CWP No. 11072 of 2007 Kavish Khurana ........Petitioner Vs. Union of India and others ....Respondents 53. CWP No. 11073 of 2007 Vijay Kumar ........Petitioner Vs. Union of India and others ....Respondents 54. CWP No. 11074 of 2007 Madan Lal Vohra ........Petitioner Vs. Union of India and others ....Respondents Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -10- 55. CWP No. 11075 of 2007 Menakshi Bhasin ........Petitioner Vs. Union of India and others ....Respondents 56. CWP No. 11077 of 2007 Sh. Kimti Lal Jain ........Petitioner Vs. Union of India and others ....Respondents 57. CWP No. 11078 of 2007 Neena Jain ........Petitioner Vs. Union of India and others ....Respondents 58. CWP No. 11164 of 2007 Sh. Madhav Lal Goyal ........Petitioner Vs. Union of India and others ....Respondents 59. CWP No. 11182 of 2007 Sh. Sunil Goyal ........Petitioner Vs. Union of India and others ....Respondents CORAM: Hon'ble Mr. Justice Jasbir Singh Hon'ble Mr. Justice G.S. Sandhawalia Present:- Ms. Akshay Bhan, Advocate with Mr. Alok Mittal, Advocate, for the petitioner Mr. Rajesh Katoch, Advocate for respondent No.3-Income Tax Department --- Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -11- Jasbir Singh, J. (Oral) 1. This order shall dispose of a bunch of 59 writ petitions bearing CWPs No. 10534, 11022 to 11075, 11077, 11078, 11164 and 11182 all of 2007, as common questions of law and facts are involved therein. The facts are being taken from CWP No. 10534 of 2007 for dictating this order. In this writ petition challenge has been made to the provisions of Section 245D(2A) and Section 245D(2D) and Section 245HA of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) as substituted by an amendment by the Finance Act, 2007 with effect from 1.6.2007 being ultra vires. 2. The premises of the petitioner were searched under Section 132 of the Act on 17.1.1995. Thereafter, he filed an application on 29.1.1997 before the Settlement Commission-respondent no.2 under Section 245C(1) for assessment years 1993-94 to 1995-96. An order was passed on 16.12.1997 under Section 245D(1) allowing the petitioner to proceed with the application for the said assessment years and to pay the additional amount of income tax payable on the income disclosed and furnish proof of such payment to the Settlement Commission and the Assessing Officer as per provisions of Sub Section (2A) of 245D of the Act (prior to the amendment). It was further directed in case the additional amount is not paid within the time specified, the amount of income tax remaining unpaid together with interest payable thereon under sub section (2C) of Section 245D would be recovered in accordance with the provisions of Section 245D (2D). The averment of the petitioner is that liability of the said additional amount was duly discharged. Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -12- 3. Thereafter, vide amendment from 1.6.2007 changes were made in sub sections (2A) & (2D) of Section 245D and Section 245HA which provided where an application for settlement of case before the Settlement Commission was made before 1.6.2007 then tax along with interest thereon must be paid on or before 31.7.2007 failure of which would result in the application not to proceed further. 4. Accordingly, the said amendment was challenged on the ground that the applicability of Sections 234A, 234B and 234C relating to levy of interest in case of default in filing return and delay in payment or deferment of advance tax to the proceedings before the Settlement Commission under Chapter XIX-A, had been referred to the Constitution Bench of the Supreme Court in Brij Lal and others Vs. Commissioner of Income-Tax [2010] 328 ITR 477 (SC). Challenge was also further raised on the ground that the said amendment was retrospective in operation and it is arbitrary and unreasonable. 5. Notice of motion was issued on 19.7.2007. Thereafter, on 30.7.2007, this writ petition was admitted. The petitioner was directed to deposit the additional tax along with interest, as per the amended provisions, referred to above, subject to the final out come of this writ petition. 6. The matter came up for hearing before this Court on 25.2.2009. It was noted that challenge to the above said provisions was pending before the Supreme Court. To await decision, the matter was adjourned. 7. Today before us, it is not disputed that the Supreme Court has Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -13- adjudicated upon the validity of the above said provisions in the case of Brij Lal and others v. Commission of Income Tax reported in (2010) Vol.328 ITR 477 (SC). 8. Counsel for respondent No.3 states that the dispute in these writ petitions is covered by ratio of the judgment in Brij Lal's case (supra) and the cases are liable to be dismissed. 9. A perusal of the Brij Lal's case (supra) case would show that the Apex Court while deciding the issue as to whether interest was payable under the proceedings pending before the Settlement Commission under Chapter XIX-A of the Act held that the applicant has to pay additional amount of tax with interest for which the application for settlement would be maintainable upto the stage of Section 245D(1) and the Settlement Commission cannot reopen its concluded proceedings under Section 154 of the Act so as to levy interest under Section 234B. It was noticed that amendment made by the Finance Act, 2007 with effect from 1.6.2007 was for this purpose. Relevant portion of the judgment reads as under:- “Interest on default in payment of advance tax comes under sections 234A, 234B, 234C, which fall in Chapter XVII which deals with collection and recovery of tax. It is important to note that interest follows computation of additional payment of income tax under sections 245C(1B) and (1C). This is how sections 234A, 234B and 234C get engrafted into Chapter XIX-A at the stage of section 245D(1). As stated, till the Settlement Commission decides to admit the case under section 245D(1) the proceedings under the normal provisions Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document CWP No. 10534 of 2007 and connected matters -14- remain open. But, once the Commission admits the case after being satisfied that the disclosure is full and true then the proceedings commence with the Settlement Commission. In the meantime, applicant has to pay the additional amount of tax with interest without which the application for settlement would not be maintainable. Thus, interest under section 234B would be payable up to the stage of section 245D(1). Our view is supported by the amendment made by Finance Act of 2007 w.e.f. 1.6.2007 in which interest is required to be paid for maintainability of the application for settlement.” 10. Keeping in view the said observations, the present writ petitions have thus, become infructuous in terms of the ratio of judgment mentioned above as the said amendment has been approved by the Apex Court. 11. In the matters which have already been decided, it is open to the applicants to seek refund in case the Settlement Commission has decided in their favour and where the cases are still pending, respondent no.2-Settlement Commission shall pass orders keeping in view the above referred judgment. (Jasbir Singh) Judge (G.S. Sandhawalia) Judge 5.8.2013 Ashwani/Pardeep Arora Kumar Ashwani 2013.09.04 14:32 I attest to the accuracy and integrity of this document "